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Part 2 Human resource management in practice - Palgrave

Part 2 Human resource management in practice - Palgrave

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138 Human resource management in practice 1 Functional flexibility involves opportunities for role and task variety and is normally associated with the core workforce. Higher levels of training and development in these core workers mean that they tend to experience higher levels of job security (Burgess, 1997). 1 Numerical flexibility, as the name suggests, refers to techniques to vary the quantity of labour on hand, rather than being related to investments in the range and scope of the employee skill base. Internal numerical flexibility refers to the amount and time of labour input required of existing employees; overtime and flex-time are examples of this type of flexibility (Rimmer and Zappala, 1988). Alternatively, external numerical flexibility involves changing the actual number of employees as well as the hours that they work. This latter type of numerical flexibility covers the arrangements made with casual or temporary workers who are called in when needed but do not benefit from a permanent contractual relationship with the employer. Both functional and numerical flexibility are facilitated by financial and procedural flexibility: 1 Financial flexibility refers to the compensation system that builds in variations in wages for different types of worker (Atkinson, 1984). These arrangements allow organizations to reward and therefore encourage skill development in the core workforce. 1 Finally, procedural flexibility is critical in that it provides the consultative mechanisms for introducing the other forms of flexibility through changes in both legal and traditional practices covering employment (Boyer, 1988). The promise of these forms of flexibility to help organizations respond more easily to environmental fluctuations and match labour resources more closely with variations in supply and demand have led to major shifts in the workforce profile. Spain, France, The Netherlands, Finland and Australia are examples of countries that have shown a large growth in the use of temporary employment conditions (Campbell and Burgess, 2001). In the Australian setting in 2003, for example, over a quarter (28 per cent) of all wage and salary earners were employed on a casual basis, and in the period since 1988 more than half of all new jobs created have gone to casual workers (Kryger, 2004). Despite the benefits in terms of flexibility that are offered by alternative forms of work, the arrangements create numerous challenges for both employees and organizations. For the employee, casual work is closely associated with poor working conditions, including low hourly rates of pay, low and irregular earnings, reduced employment security, lack of access to notice and severance pay, reduced access to unfair dismissal rights, vulnerability to changes in schedules, loss of skilland age-related pay increments, and lack of representational rights (Pocock et al., 2004). For the employer, although using this category of worker is associated with flexibility and often reduced costs, the arrangement does have potentially negative ramifications (Buultjens, 2001). For example, casual workers are, owing to the transient nature of their terms of employment, less likely to identify strongly with the organization (Hall, 2006); as a result, they may not absorb and display appropriate organizational values and behaviours. 9780230251533_07_cha06.indd 138 01/11/2011 12:09

, The limited organizational investment in casual workers also means that these employees may have less opportunity to develop the skills necessary for the job, and therefore the contribution that they make may be limited to generic industry tasks rather than adding real value in terms of the specialized tasks expected by some service providers. Lowry’s (2001) investigation of the work arrangements for casual employees within the registered club industry in New South Wales indicated that casual workers are employed on a primarily transactional basis and that their employment conditions are characterized by an underinvestment in employee development (Buultjens, 2001; Lowry, 2001). The impact of an underinvestment in HRM activities such as training and feedback has ramifications for the quality of the service delivery provided by these workers. Lowry’s (2001) findings, for example, indicated that some employees were so dissatisfied with the lack of feedback and recognition that they made a conscious decision not to improve the quality of their service. This finding is consistent with the previous research by Schneider et al. (1998), who established a relationship between HRM practices, including training and supportive supervision, and the quality of the service. There is evidence, however, that the move to a greater reliance on nonstandard types of worker – those without set hours or the expectation of continued employment – does have benefits for the organization. Ghosh et al. (2009) have established that the greater use of non-standard workers is positively associated with increased financial performance on the part of the firm. As well as having cost-saving benefits, non-standard arrangements allow firms to give workers a trial of employment before assigning them permanent status. Moreover, Ghosh et al.’s research indicates that non-standard forms of work are associated with a greater financial impact when firms are operating in less uncertain but more competitive environments. Once uncertainty rises, reliance on non-traditional workers becomes less effective, and when uncertainty is high, a permanent workforce becomes more valuable. Permanent staff’s high level of task flexibility and knowledge and expertise specific to the firm help an organization to sustain itself at a time when conditions are in flux. The argument is that, during periods of greater uncertainty, the core workforce assist the organization in protecting its technical edge, and consolidate activities that are considered important for organizational success (Ghosh et al., 2009). Although flexible forms of work allow companies to shed workers when they are not needed, the attraction and retention of a talented core workforce remains a priority, and it is this issue that is addressed in the following section (see also Mini Case Study 6.1). Mini Case Study 6.1 Casual workers at the BankInfo Call Centre BankInfo is a new call centre currently being set up by a small regional bank. The purpose of the call centre is to process a broad range of customer queries ranging Human resources planning from simple account questions to much more complex financial planning matters. Brad Ellis, the manager of the new centre, is focused on cost minimization and, as people are going to be his major expense, he is considering the use of a primarily 9780230251533_07_cha06.indd 139 01/11/2011 12:09 139 > 6

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